Åhléns' plans to buy NK Kosmetik would adversely affect competition if implemented. Consequently, the Competition Authority is now taking the matter to court in order to stop the takeover.

Åhléns AB has entered into an agreement with Portwear AB to purchase Department & Stores Europe AB. The operation primarily affected is the retailing of luxury beauty products at the NK stores in Stockholm and Gothenburg. The Competition Authority has examined the effects that such a takeover would have on competition and on consumers.

The Authority has now concluded that the merger would significantly impede efficient competition in the retail market for luxury beauty products within fragrance, make-up and skin care in Stockholm and Gothenburg.

“Should the deal go through, it would give Åhléns – which is already in a strong position – a virtual monopoly in the relevant markets,” says the Competition Authority’s Director General, Dan Sjöblom. “The impact on both consumers and competition would be decidedly negative, which is why we want to stop the takeover.”

The Authority is now seeking a prohibition order from the Stockholm City Court to stop the purchase.

In its application to the court, the Authority states that the competitive pressure currently being exerted on NK Kosmetik by Åhléns – and vice versa – would disappear if the deal was to go through. The purchase would entail a significant risk of higher prices and lower service levels. It would also result in higher entry barriers in the relevant markets.